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August 2017

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Alleging that the Indian mills were dumping cotton yarn, Pakistan textile mill owners welcomed the imposition of regulatory duty on the import of cotton yarn to to protect the domestic industry.

"Indian mills were dumping cotton yarn into Pakistan, due to which the federal government had imposed regulatory duty as this was the only protection available to the local industry," said Tariq Saud, Chairman of All Pakistan Textile Mills Association (APTMA).

“India, on the other hand, has imposed 26 per cent import duty on Pakistan cotton yarn and unless we get reciprocal market access there is no other way except imposition of regulatory duty on imported yarn," Saud maintained.

He further said that import for re-export (DTRE) had shown a remarkable rise increasing by over 800 % for which there was no protection. High cost of doing business and tariff subsidy to yarn export provided to yarn exporters in India has also crippled Pakistan textile industry, especially spinning & weaving industry, he alleged.

He, however, acknowledged that the DTRE policy had benefitted exporters looking for genuine value-addition in their products. Thus, according to Saud, the policy had been successful to the extent that garment exports had registered a 5 per cent increase.

Urging the government to address the issue of high cost of doing business, the APTMA chairman sought immediate removal of 4 per cent custom duty and 5 per cent sales tax on the import of raw cotton to enable the spinning industry function smoothly instead of removing regulatory duty on cotton yarn imports that would further cripple the domestic industry.

He indicated that the export of cotton yarn has drastically declined by 32 per cent during the first 11 months of 2015-16 as compared to the corresponding period of last year, mainly due to non-availability of raw cotton following a decline in production of cotton by 35 per cent in the country. (SH)